Aspen Pre-Close Statement
ASPEN PHARMACARE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa) ("Aspen Holdings")
Registration number: 1985/0002935/06
Share code: APN
and its subsidiaries (collectively "Aspen" or "the Group")
ASPEN PRE-CLOSE STATEMENT
The purpose of this announcement is to provide Aspen shareholders with an operational and
trading update for the period 1 July 2018 to 30 November 2018 before the Group enters a
closed period from 1 January 2019 until 8 March 2019. Aspen’s interim financial results are
scheduled for publication on 7 March 2019.
Over the past five years Aspen has successfully transitioned from a generics-focused
pharmaceutical business operating in a few select countries into a global multi-national
corporation with strong equity in Regional Brands as well as leading positions in specialised
therapies such as Thrombosis and Anaesthetics.
In order to successfully position the Group going forward, the focus of management is on the
following key areas over the near term:
- Drive organic growth (as measured in constant exchange rates) led by a growing
Emerging Markets’ contribution;
- Re-establish a reliable and stable supply of Anaesthetics from the manufacturers;
- Progress and complete the construction projects to enable the in-sourced
manufacture of Anaesthetics ;
- Enhance supply chain efficiencies aimed at offsetting pricing pressures and improving
- Portfolio management including divestments of non-core product portfolios as well as
exploring opportunities for strategic regional partnerships;
- Reduce gearing with a target of reducing the Net Debt to EBITDA ("Leverage") ratio to
less than 3.0 within the medium term, thereby creating greater headroom and
capacity to take advantage of future opportunities; and
- Establish a route to market strategy for the US pipeline.
Aspen management believes that these objectives are key to solidifying the foundation of the
Group’s business and providing a platform for future growth.
The Group remains on track to meet its full year guidance of Commercial Pharma organic
revenue growth (as measured in constant exchange rates) ranging between 1% and 4% based
on performance for the five months to 30 November 2018. Positive performance from
Commercial Pharma in most Emerging Markets and in Japan has been offset by weaker
performance across Europe and Russia.
Manufacturing revenue from APIs has done better than expected for the five months to 30
November 2018 and is in line with the revenue for the comparable prior period. Revenue
from finished dose form manufacture has been affected by the headwinds indicated in the
full year results presentation in September 2018.
The Nutritionals business will be treated as a discontinuing operation in the results disclosed
for the 2019 financial year in light of the agreement to dispose of this business to Lactalis.
On balance, the movements in foreign exchange rates over the period to 30 November 2018
have had a slightly favorable impact on revenue and EBITDA relative to the prior year
As part of the Group’s approach to portfolio management, it seeks opportunities to not only
acquire products, but also to divest of non-core assets, allowing enhanced operational focus
and removing complexity. Aligned to this, Aspen confirms that with effect from 1 December
2018, its wholly owned subsidiary incorporated in Mauritius, Aspen Global Incorporated,
and its Australian subsidiaries, have entered into a distribution arrangement with Mylan for
a portfolio of prescription and OTC products primarily commercialised in Australia and New
Zealand. The distribution arrangement includes an option for Mylan to purchase this
Should Mylan exercise its purchase option, which is able to do from March 2019, the
consideration for this divestment would be approximately AUD 188 million. The products
that are the subject of this arrangement recorded sales of AUD 55 million for the year ended
30 June 2018.
Aspen has also discontinued or terminated several third party licenses in Australia.
Excluding these and the products covered by the Mylan distribution agreement, Commercial
Pharma in Australia has recorded positive growth for the five months ended 30 November
Progress on conditions precedent to disposal of the Nutritionals business
Aspen is pleased to advise that significant progress has been made in procuring the
fulfilment of the conditions precedent to the disposal by Aspen to B.A.S. S.A. ("Lactalis") of
Aspen’s Nutritionals business (the "Lactalis transaction"). Currently, each of Aspen’s
Lenders, the South African Reserve Bank and Nestlé have consented and/or approved the
disposal, insofar as is necessary. It is expected that the outstanding conditions precedent
will be fulfilled during the first quarter of the 2019 calendar year.
Management has engaged with Aspen’s syndicate of funders providing multi-currency
facilities to negotiate a conditional and temporary adjustment to Aspen’s Leverage ratio
covenant as at 31 December 2018 such that if the Lactalis transaction does not complete on
or before 31 December 2018 then Aspen’s 31 December 2018 Leverage ratio covenant limit
will be increased from 4.00 to 4.75 times.
13 December 2018
Investec Bank Limited
Cautionary Note Regarding Forward-Looking Statements
This announcement may contain prospects, projections, future plans and expectations,
strategy and other forward-looking statements that are not historical in nature. These which
include, without limitation, prospects, projections, plans and statements regarding Aspen's
future results of operations, financial condition or business prospects are based on the current
views, assumptions, expectations, estimates and projections of the directors and management
of Aspen about the business, the industry and the markets in which Aspen operates. These
statements are not guarantees of future performance and are subject to known and unknown
risks, uncertainties and other factors, some of which are beyond Aspen’s control and are
difficult to predict. Actual results, performance or achievements could be materially different
from those expressed, implied or forecasted in these forward-looking statements.
Any such prospects, projections, future plans and expectations, strategy and forward-looking
statements in the announcement speak only as at the date of the announcement and Aspen
assumes no obligation to update or provide any additional information in relation to such
prospects, projections, future expectations and forward-looking statements. Given the
aforementioned uncertainties, current and prospective investors are cautioned not to place
undue reliance on any of these projections, future plans and expectations, strategy and
Aspen is a leading global player in specialty, branded and generic pharmaceuticals with an
extensive basket of products that provide treatment for a broad spectrum of acute and
chronic conditions experienced through all stages of life. Aspen continues to increase the
number of lives benefitting from its products, reaching more than 150 countries.
Aspen has a strong presence in both emerging and developed countries. Its emerging
market footprint includes Sub-Saharan Africa, Latin America, South East Asia, China, Eastern
Europe and the Commonwealth of Independent States, comprising Russia and the former
Soviet Republics. From a developed world perspective Aspen is one of the leading
pharmaceutical companies in Australia and has a growing presence in other developed
countries, most notably in Western Europe.
Aspen operates with an established business presence in approximately 50 countries
spanning 6 continents and employs more than 10,000 people. The Group operates 25
manufacturing facilities across 18 sites. Aspen holds international manufacturing approvals
from some of the most stringent global regulatory agencies including the FDA, TGA and
EMA. Aspen’s manufacturing capabilities are scalable to demand and cover a wide variety of
product-types including oral solid dose, liquids, semi-solids, steriles, biologicals, APIs and
Aspen is the largest pharmaceutical company listed on the JSE Limited (share code: APN)
and ranks amongst the top 40 listed companies on this exchange. For more information
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